African Experience with Multilateral Trade Agreements of the European Economic Community (EEC): A Statistical Evidence

The EEC granted tariff preferences to 18 African countries as associate members (AAM). Using Balassa’s incoming elasticity approach, Ouattara (1972) examined the trade creation and trade diversion impact of the EEC-AAM association. He failed to provide conclusive evidence, partly because the model did not adequately capture the degree of intrazonal trade liberalization and extrazonal trade discrimination. Using a modified Balassa models it is found that within integration, AAM countries’ exports to the EEC more than doubled. The favourable impact of EEC preferences on AAM is more pronounced when trade with France is excluded. The measures of trade diversion effects further suggest, that the EEC-AAM association did not adversely affect EEC imports from countries not directly competing with the AAM, but has been harmful to the competing African countries. Bibliogr., notes, sum.

Title: African Experience with Multilateral Trade Agreements of the European Economic Community (EEC): A Statistical Evidence
Authors: Mullei, Andrew K.
Scaperlanda, Anthony E.
Year: 1986
Periodical: Eastern Africa Economic Review
Volume: 2
Issue: 1
Period: June
Pages: 61-67
Language: English
Geographic term: Africa
Abstract: The EEC granted tariff preferences to 18 African countries as associate members (AAM). Using Balassa’s incoming elasticity approach, Ouattara (1972) examined the trade creation and trade diversion impact of the EEC-AAM association. He failed to provide conclusive evidence, partly because the model did not adequately capture the degree of intrazonal trade liberalization and extrazonal trade discrimination. Using a modified Balassa models it is found that within integration, AAM countries’ exports to the EEC more than doubled. The favourable impact of EEC preferences on AAM is more pronounced when trade with France is excluded. The measures of trade diversion effects further suggest, that the EEC-AAM association did not adversely affect EEC imports from countries not directly competing with the AAM, but has been harmful to the competing African countries. Bibliogr., notes, sum.